Madras High Court

Siddartha Pande vs State Rep. By on 21 November, 2023

Author: G.K.Ilanthiraiyan

Bench: G.K.Ilanthiraiyan

                                                                          Crl.O.P.No.12791 of 2021

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                   DATED: 21.11.2023

                                                       CORAM:

                             THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN

                                             Crl.O.P.No.12791 of 2021
                                        and Crl.M.P.Nos.7069 & 7072 of 2021

                     1. Siddartha Pande
                     2. Benedict Ravinran
                     3. Jiss Manapurath Jose
                     4. Jitesh Nair
                     5. Rahul Tanaji Pol
                     6. Sanjay Gon Slaves
                     7. Saju Varghese                                         ...Petitioners
                                                          Vs.

                     1. State rep. by
                        The Inspector of Police,
                        Central Crime Branch,
                        Cyber Crime Cell,
                        Vepery, Chennai.
                        (Crime No. 72 of 2009)

                     2. Financial Software & Systems Pvt. Ltd.,
                        Rep. by its Legal Officer,
                        Debashish Josh
                        502-A, South Block,
                        Tidel Park, No.4,
                        Canal Bank Road,
                        Chennai – 600 113.                                    ... Respondents

                     Prayer: Criminal Original petition filed under Section 482 of Code of
                     Criminal Procedure, to call for the records in C.C.No.2323 of 2021 on the

https://www.mhc.tn.gov.in/judis
                     Page 1 of 12
                                                                              Crl.O.P.No.12791 of 2021

                     file of the learned XI Metropolitan Magistrate, Saidapet, Chennai and
                     quash the same.


                                       For Petitioners   : Mr.N.R.Elango, Senior Counsel
                                                           For M/s.RRR Legal
                                       For Respondents
                                             For R1    : Mr.A.Gopinath
                                                         Government Advocate (Crl. Side)
                                             For R2    : Mr.G.Prabakaran
                                                         For M/s. R and P Partners.

                                                         ORDER

This petition has been filed to quash the proceedings in

C.C.No.2323 of 2021 on the file of the learned XI Metropolitan

Magistrate, Saidapet, Chennai, thereby taken cognizance for the offences

punishable under Sections 380, 408 r/w. 120(b) of IPC, as against the

petitioners.

2. The case of the prosecution is that the second respondent

company is a private limited company incorporated under the Companies

Act, 1956. It carries on business, inter alia, of providing end to end,

turnkey solutions and products in the area of transaction processing and

payment solutions at customer location. It also provides a range of

implementation and product design services in the areas of transaction

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processing and payment solutions and also provides hosted transaction

processing and switching services including terminal deployment and

managed services. It also licensed the software products and also support

services like customization and production support. It offers the software

products as a comprehensive package comprising not only of software

license and maintenance including site technical support, customization,

production support etc. There was a strictly instruction to their employees

to maintain the confidentiality of the confidential and properitory

information of the complainant. The details of confidentiality obligations

would be spelt out in the appointment order issued by the company. It is

also entered into non disclosure agreement between the employees.

Therefore, the employees are required to strictly abide by the terms and

conditions of confidentiality given in the appointment order.

3. Accordingly, the accused A1 to A7 had joined in the

complainant company at different times and they were holding different

posts. They were aware of the confidentiality obligations and they shall

not disclose the complainant's confidential details and the customer data

base to any other person. Further they shall not make use of the

confidentiality obligations to get competitive advantage for themselves. https://www.mhc.tn.gov.in/judis

The accused resigned one by one and started competitive business by

using the confidential information obtained from the complainant during

their employment. It is blatant violation of the confidential obligations

signed by them and also breach of trust.

4. It is further alleged that during their employment, the

accused persons started company carrying on business similar to that of

the complainant and also duly incorporated in the name and style of

Concerto Software & Systems Private Limited on 28.05.2008, bearing

registration No.182792 in which A1 to A4 are Directors. They were taken

away the customer data and confidential information even before their

resignation from the company. The complainant's intellectual properties

used by the accused for preparing presentation materials during their

employment with the complainant which contains the business details of

the complainant and shared with the other accused persons. Further, the

complainant was carrying on projects for various banks in the Middle

East and the same is now being usurped by the accused company, which

was floated during their employment with the complainant. The accused

also used the technical know-how stolen from the complainant which was

made available to the accused by the complainant knowing fully well that https://www.mhc.tn.gov.in/judis

they should not misuse the confidential information and technical know-

how of the complainant, thereby the complainant suffers huge loss.

5. On receipt of the said complaint, the first respondent

registered a FIR in Crime No.72 of 2009 for the offences under Section

406 r/w. 120(b) of IPC. After completion of investigation, they filed final

report and same has been taken cognizance for the offences under Section

380, 408 r/w 120(b) of IPC in C.C.No.2323 of 2021, on the file of the

learned XI Metropolitan Magistrate, Saidapet, Chennai.

6. The learned Senior Counsel appearing for the petitioners

submitted that no property was stolen by the petitioners. After their

resignation, they started new company in the name and style of Concerto

Software & Systems Private Limited. They are only competitive to the

defacto complainant company and there was no property stolen by them.

The technology which was used by the defacto complainant and the

petitioners are one and the same and it is common to all. Therefore, it

would not amount to theft. There was no property involved in order to

attract the offence under Section 406 of IPC. Whatever the technology

and methods used by the petitioners in their new company are available https://www.mhc.tn.gov.in/judis

in public domain. He further submitted that the statement recorded under

Section 161 of Cr.P.C., revealed that the presentation about their

proposed company was E-mailed by them. It would not amount to any

theft or breach of trust.

7. The learned counsel appearing for the second respondent

submitted that there is intellectual property which is owned by the

defacto complainant. Even at the time of employment, they were entered

into non disclosure agreement and accordingly there were not supposed

to disclose and use the intellectual property which was handled by them

for the defacto complainant clients. Therefore, there is clear case of theft

and breach of trust. Therefore, there are ingredients available to constitute

the offences under Sections 380, 408 r/w 120(b) of IPC.

8. The learned Government Advocate (Crl. Side) submitted that

the petitioners are arrayed as A1 to A7. They were charged for the

offences under Sections 380, 408 r/w 120(b) of IPC. All the grounds

raised by the petitioners can be considered before the trial Court during

the trial.

https://www.mhc.tn.gov.in/judis

9. Heard the learned counsel appearing on either side and

perused the materials placed before this Court.

10. There are totally seven accused in which the petitioners are

arrayed as A1 to A7. All the petitioners are ex-employee of the second

respondent. They had led the second respondent to believe by making

false representation that they would protect the interest of the second

respondent and also its confidential information. In fact, while entering

into the service, they executed non disclosure agreement. Even then, they

had with malafide intent induced the second respondent to part with their

confidential information, technical know how, customer data base and

project information. Thereafter, they had been entrusted with the said

work to the respective clients. However, they had malafied intention to

cause wrongful loss to the second respondent, started a new company

even during their employment with the second respondent. It is gross

violation of trust placed on the petitioners by the second respondent.

11. As rightly pointed out by the learned counsel appearing for

the second respondent, the entire software owned by the second

respondent as intellectual property. The said data base and other project https://www.mhc.tn.gov.in/judis

which supported to their respective clients were stolen by the petitioners

and started new company. Therefore, the petitioners company is not

competitive company to the second respondent. Whereas, they were

stolen the entire software and started the new company. Therefore, there

are ingredients to attract the offences under Sections 380, 408 r/w.

120(b) of IPC, as against the petitioners. That apart, all the grounds

raised by the learned counsel appearing for the petitioners are mixed

question of fact and it cannot be considered.

12. In this regard, it is relevant to rely upon the judgment of the

Hon'ble Supreme Court of India passed in Crl.A.No.579 of 2019 dated

02.04.2019 in the case of Devendra Prasad Singh Vs. State of Bihar &

Anr., wherein it is held as follows:-

" 12.So far as the second ground is concerned, we are of the view that the High Court while hearing the application under Section 482 of the Cr.P.C. had no jurisdiction to appreciate the statement of the witnesses and record a finding that there were inconsistencies in their statements and, therefore, there was no prima facie case made out against respondent No.2. In our view, this could be done only in the trial while deciding the issues on

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the merits or/and by the Appellate Court while deciding the appeal arising out of the final order passed by the Trial Court but not in Section 482 Cr.P.C. proceedings.

13.In view of the foregoing discussion, we allow the appeal, set aside the impugned order and restore the aforementioned complaint case to its original file for being proceeded with on merits in accordance with law.

13. The Hon'ble Supreme Court of India dealing in respect of the

very same issue in Crl.A.No.1572 of 2019 dated 17.10.2019 in the case

of Central Bureau of Investigation Vs. Arvind Khanna, held as follows:

“19. After perusing the impugned order and on hearing the submissions made by the learned senior counsels on both sides, we are of the view that the impugned order passed by the High Court is not sustainable. In a petition filed under Section 482 of Cr.P.C., the High Court has recorded findings on several disputed facts and allowed the petition. Defence of the accused is to be tested after appreciating the evidence during trial. The very fact that the High Court, in this case, went into the most minute details, on the allegations made by the appellant-C.B.I., and the defence put-forth by the respondent, led us to a conclusion that the High Court has exceeded its power, while exercising its

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inherent jurisdiction under Section 482 Cr.P.C.

20.In our view, the assessment made by the High Court at this stage, when the matter has been taken cognizance by the Competent Court, is completely incorrect and uncalled for.”

14. Further the Hon'ble Supreme Court of India also held in the

order dated 02.12.2019 passed in Crl.A.No.1817 of 2019 in the case of

M.Jayanthi Vs. K.R.Meenakshi & anr, as follows:

"9. It is too late in the day to seek reference to any authority for the proposition that while invoking the power under Section 482 Cr.P.C for quashing a complaint or a charge, the Court should not embark upon an enquiry into the validity of the evidence available. All that the Court should see is as to whether there are allegations in the complaint which form the basis for the ingredients that constitute certain offences complained of. The Court may also be entitled to see (i) whether the preconditions requisite for taking cognizance have been complied with or not; and (ii) whether the allegations contained in the complaint, even if accepted in entirety, would not constitute the offence alleged.

..............

13. A look at the complaint filed by the appellant

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would show that the appellant had incorporated the ingredients necessary for prosecuting the respondents for the offences alleged. The question whether the appellant will be able to prove the allegations in a manner known to law would arise only at a later stage...................."

15. In view of the above discussions, this Court is not inclined to

quash the proceedings and the Criminal Original Petition stands

dismissed. The trial Court viz., the learned XI Metropolitan Magistrate,

Saidapet, Chennai, is directed to complete the trial within a period of six

months from the date of receipt of a copy of this Order. Consequently,

connected miscellaneous petitions are closed.

21.11.2023

Internet: Yes Index : Yes/No Speaking/Non Speaking order

rts

https://www.mhc.tn.gov.in/judis

G.K.ILANTHIRAIYAN. J,

rts